The Conservatives say the small print of Jeremy Corbyn’s manifesto contains plans to replace council tax with a new Land Value Tax to raise billions for Labour’s reckless spending pledges.

The blueprint for this new tax on "ordinary working families" has been provided by the Labour Land Campaign, the Tories claim, with Shadow Chancellor John McDonnell claiming the tax will “raise the funds we need”.

Labour has said it is looking at reforming council tax and considering a land value tax.

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SMALL PRINT: The Conservatives say the Labour manifesto includes plans for a new levy

The new tax would be imposed as a 3% levy on the value of land which would result in yearly tax bill of £3,837 for an average family home in England – a massive 224% increase on the current average council tax bill of £1,185.

The tax would fall hardest on areas with higher land prices, including London, the South and thriving market towns.

The Tories argue that think tanks have warned that a Land Value Tax would lead to mortgage holders being pushed into negative equity.

Foreign Secretary Boris Johnson said: “Jeremy Corbyn needs to hit ordinary working families with a bombshell of new taxes to pay for his reckless hard-left giveaways, and this lays bare the price we would all pay.

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NEW TAX: John McDonnell has claimed the tax will 'raise the funds we need'

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“Corbyn’s Garden Tax will send tax bills soaring, house prices plummeting, plunge people into negative equity and force families to build over their back gardens.

“This nonsensical policy sums up how Jeremy Corbyn, along with his SNP, Lib Dem and Green comrades in the coalition of chaos would bring misery to every single family in Britain. It would wreck our economy, devastate farmers and increase the cost of food on the shelves.

“Only a vote for Theresa May and her local Conservative candidates will stop this terrible new town hall tax from becoming reality.”

A Labour spokesman told Daily Star Online: "This isn’t true, we're looking at reforming council tax and business rates, we’re also looking at land value tax.

"We’re not talking about replacing council tax and business rates with a land value tax.

"To be clear we will initiate a review into reforming council tax. We will initiate a review into business rates.

"We will look at whether to introduce a new land value tax and how that would work."

ClarificationWe have been asked by the Labour Land Campaign (LLC) to clarify that the figures quoted in this article were originally produced by the LLC in a research paper entitled “A Strategy For Replacing Council Tax and Business Rates With a Land Value Tax, a First Step Towards a More Equitable Tax System”. The article references this research paper as a ‘blue print’ for the Labour Party’s Manifesto. The Manifesto promised to ‘initiate a review into reforming council tax and business rates and consider new options such as a land value tax’, according to the LLC their work was not produced as a ‘blue print’. The LLC state they are not affiliated with the Labour Party though they accept a large number of their members are also members of the Labour Party, for example Carol Wilcox (who wrote the research paper and gave a speech to the 2016 Labour Party Conference on the topic of land value tax) and also John McDonnell the Shadow Chancellor. Finally the LLC accept the figures were taken from their research but they dispute the conclusions which have been drawn by the Conservative Party.